Chancellor Angela Merkel stood firm on her decision to open Germany to refugees despite mounting criticism, telling citizens in her New Year's address Thursday that the record influx is "an opportunity for tomorrow".
Merkel has earned praise at home and abroad for her decision to allow in a record wave of refugees, about half from war-torn Syria.
But with one million asylum seekers arriving in 2015 alone, opposition and doubts are growing, including within her own conservative camp and among the population.
Acknowledging the immense task of dealing with the massive influx, Merkel braced Germans for more challenges ahead and made a strong call for unity.
"Next year is about one thing in particular: our cohesion," she said. "It is important we don't allow ourselves to be divided.
"It is crucial not to follow those who, with coldness or even hatred in their hearts, lay a sole claim to what it means to be German and seek to exclude others," she urged, in a reference to ring-wing populists and xenophobic street rallies.
The efforts put in to cope with the challenges would be worth it in the end because "countries have always benefitted from successful immigration, both economically and socially", she said.
"I am convinced that, handled properly, today's great task presented by the influx and the integration of so many people is an opportunity for tomorrow," said Merkel.
Germany took in almost 1.1 million asylum seekers this year, five times last year's total, the Saechsische Zeitung regional daily reported Wednesday, citing unpublished official figures.'Wishful thinking?'
Merkel's unwavering stance on refugees has won her accolades, including from media organisations like Agence France-Presse, the Financial Times and Time which named her the most influential person of the year.
But at home, her usually stellar ratings have fallen as opposition grows within her conservative camp and popular concerns rise about the influx.
In a bid to counter these concerns, Merkel has vowed steps to reduce refugee numbers next year.
Her plan involves persuading other EU members to take in more refugees, and an EU deal with gateway country Turkey to better protect its borders.
Mindful of security concerns, Berlin is also tightening its scrutiny of asylum seekers by reintroducing individual interviews from Friday for all applicants, including Syrians, who had previously benefitted from simplified procedures.
But several former eastern bloc countries have so far shown no signs of relenting, with Czech President Milos Zeman last week calling the current refugee influx to Europe "an organised invasion".
Hungarian Prime Minister Viktor Orban's government has meanwhile filed a legal challenge against the EU's plan to distribute 160,000 asylum-seekers under a quota system.
"Merkel's solution for the asylum seeker crisis remains wishful thinking," Die Welt newspaper said, adding that addressing the root causes of war and instability that are sending people fleeing to Europe is another tough task.
"2015 was certainly Angela Merkel's year. But 2016 should be a decisive year for her," it said.
A European diplomat speaking on condition of anonymity predicted that "if the number of refugees falls sharply, it would be fine, but if it continues at the current rate, it will be very difficult for her politically."
Three regional elections to be held in March would serve as key tests, and opinion polls are already predicting a surge in support for the populist anti-refugee movement AfD.
Merkel herself acknowledged that "there has rarely been a year in which we were challenged so much to follow up our words with deeds".
"There is no question that the influx of so many people will keep demanding much of us.
"It will take time, effort and money," she said, thanking volunteers and police, soldiers and administrators for their "outstanding" accomplishments and "doing far, far more than their duty".